The article analyzes the legislative norms that provide for the joint liability for damages caused by a corporate group of persons, the current practice of the Supreme Court regarding the resolution of corporate disputes on squeeze-out procedures.

The history of the emergence and conditions of application of the doctrine of “lifting the corporate veil” have been studied. It was recognized as appropriate by the court to apply the doctrine of “lifting the corporate veil” in order to ensure the effective protection of minority shareholders as an extraordinary measure in case of abuse by the members of the corporate group of the right to control the company and joint actions in the process of implementing the mandatory sale of shares with the aim of buying out the shares of minority shareholders at an undervalued cost.

Corporate structures of the MP Azovstal PrJSC, Avdiyiv Coke Chemical Plant PrJSC, Ukrainian Graphite PrJSC, MMK Ilycha PrJSC, DTEK Dniproenergo JSC, Zakarpattiaoblenergo PrJSC, which conducted squeeze-out procedures were analyzed. These companies conducted squeeze-out procedures using corporate structures, affiliated subsidiary companies, related persons. The beneficiaries (beneficiaries) of the acquired 100 % corporate control were determined, the application of the doctrine of “lifting the corporate veil” and bringing the members of the corporate group to joint and several liability were investigated.

The issuer, the applicant of the public irrevocable claim, its affiliated persons and persons acting jointly, the ultimate beneficial owner are recognized as the proper defendants in disputes related to squeeze-out procedures. The specified persons, who make up a single corporate group, are jointly and severally liable to the minority shareholders for the damages caused in the process of the squeeze-out procedure.

Derivative suit is offered to spread over the losses caused by company officials to its shareholders in the procedures of redemption, compulsory redemption and compulsory sale of shares. Disputes of compulsory sale of shares in the squeeze-out procedure belong to the subject jurisdiction of commercial courts as disputes on deeds of shares, regardless of the dispute parties.

Bibliography

Authored books

1. Makhinchuk V, Subsydiarna vidpovidalnist kintsevykh benefitsiarnykh vlasnykiv (zasnovnykiv, uchasnykiv, aktsioneriv) i posadovykh osib za zoboviazanniamy yurydychnoi osoby – borzhnyka: problemy teorii i praktyky realizatsii doktryny zniattia korporatyvnoi vuali (NDI pryvat prava i pidpr-va im ak F H Burchaka NAPrN Ukrainy 2020) (in Ukrainian)

Journal articles

2. Freedman J, ‘Limited liability: Large company theory and small firms’ [2000] 63 (3) Modern Law Review 317–54 (in English).

3. Fujita T, ‘The Regulation of Corporate Groups in Japan’ (2019) 14 ICCLP Publications 150 (in English).

4. Schiessl M, ‘The Liability of Corporations and Shareholders for the Capitalization and Obligations of Subsidiaries under German Law’ [1985–1986] 480 (7) Nw. J. Int’l L. & Bus. 483, 503, 504 (in English).

5. Ierema M, ‘Problemy yurydychnoi vidpovidalnosti aktsioneriv v aktsionernykh pravovidnosynakh’ (2017) 1 Forum prava 45–51 (in Ukrainian).

6. Karnaukh T, ‘Doktryna “pidniattia korporatyvnoi vuali”: sutnist ta perspektyvy zastosuvannia v Ukraini’ (2013) 3 Yurydychna Ukraina 53–60 (in Ukrainian).

These

7. Prokopiuk A, ‘Korporatyvna vidpovidalnist v aktsionernykh pravovidnosynakh’ (dys. doktor filosofii, 2023) (in Ukrainian).

Conference papers

8. Sabodash R, ‘“Pronyknennia pid korporatyvnu vual” u praktytsi yevropeiskoho sudu z prav liudyny’ v Korporatyvne pravo Ukrainy ta yevropeiskykh krain: pytannia teorii ta praktyky: Zbirnyk naukovykh prats za materialamy XV Mizhnarodnoi naukovopraktychnoi konferentsii (NDI pryvatnoho prava i pidpryiemnytstva im akademika F H Burchaka NAPrN Ukrainy, 2017) 200–4 (in Ukrainian).